Louise Curley

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background-color:#b8b8b8; German Investors A Little Less Optimistic
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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215d.jpg" align="right" border="0" height="265" width="353">
The ZEW
indicator of investors sentiment in Germany declined for the third
month in December.&nbsp; The percent balance of opinion on macro
expectations six months ahead is now at 50.4%, down 7.3 percentage
points from the peak of 57.7% in September.&nbsp; The
current&nbsp; level, however, is well above the long term average
of 27.0%.&nbsp; Although the balance between those respondents who
view current conditions negatively over those who view them positively
is still high at 60.6%, it declined five percentage points in December
and is well below the peak, 92.8%, reached in May of this year when it
was hard to find any optimists.&nbsp; The first chart shows the
percent balances for current conditions and the macro expectations over
the next six months.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215e.jpg" align="right" border="0" height="265" width="353">
The survey is based on the opinions of 277
investors and analysts and took place from November 30 through December
14.&nbsp; During that period, data on new orders, industrial
production and retail sales for October were announced.&nbsp;
Industrial Production was down 1.86%, new orders for manufacturing were
down 2.57%, motor vehicle sales were down 1.37% and retail sales,
excluding motor vehicle sales, were flat.&nbsp; These data
suggested that the economic expansion might be somewhat slower than
earlier expectations and may have dampened some of the optimism of the
participants.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215f.jpg" align="right" border="0" height="265" width="353">
In spite of the decline in the overall outlook,
participants in the survey are still relatively optimistic regarding
the profit outlook.&nbsp; There are only four industries out of the
thirteen industries surveyed where the current balance of opinion is
for lower profits.&nbsp; These are: banking, construction,
utilities and services.&nbsp; They are shown in the second
chart.&nbsp;&nbsp; Of the remaining industries--insurance,
chemicals/pharmaceuticals, steel/metal, electronics, machinery,
telecommunications, information technology--the balance of opinion is
for higher profits; and for vehicles/automotive and consumption/trade,
the balance of opinion is for smaller losses.&nbsp; The balance of
opinion for higher profits has risen significantly for the information
technology, machinery, steel/metal and chemicals/pharmaceuticals
industries, as can be seen in the third chart.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct&nbsp; 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09&nbsp;</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
<th scope="col">April 09</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Current Conditions</td>
<td>-60.6</td>
<td>-65.6</td>
<td>-72.2</td>
<td>-74.0</td>
<td>-77.2</td>
<td>-89.3</td>
<td>-89.7</td>
<td>-92.8</td>
<td>-91.6</td>
</tr>
<tr>
<td class="firstcol">Macro Expectations (6 Months
Ahead)&nbsp;</td>
<td>50.4</td>
<td>51.1</td>
<td>56.0</td>
<td>57.7</td>
<td>56.1</td>
<td>39.5</td>
<td>44.8</td>
<td>31.1</td>
<td>13.0</td>
</tr>
</tbody>
</table>
</body></html>

The ZEW indicator of investors sentiment in Germany declined for the third month in December. The percent balance of opinion on macro expectations six months ahead is now at 50.4%, down 7.3 percentage points from the peak of 57.7% in [...]

Rising Exports Fuel Rise in Japanese Industrial Production

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215a.jpg" align="right" border="0" height="265" width="353">There
was a
broadening of inflationary pressure last month as measured by the
producer price index. The PPI for finished goods jumped 1.8% after the
tame 0.3% October increase. The rise was by far the largest increase in
months and it lifted the y/y gain to 2.7%, its fastest since October of
last year. In addition, the November increase was more-than-double the
Consensus expectation.

 Higher energy costs led the strength in the
PPI last month. The 6.9% increase lifted the y/y increase to 10.6%, its
strongest since September 2008. Gasoline prices increased 8.2% (35.9%
y/y). Elsewhere, the gain in energy prices was more moderate. Fuel oil
prices increased 10.8% but they remained down 7.1% from last year.
Natural gas prices also increased a lesser 3.9% and they were down
15.6% from the year ago level. Food prices increased a moderate 0.5%
but the increase left prices 1.6% lower than last year. Beef &amp;
veal prices were off 8.4% y/y, dairy product prices fell 7.3% and
vegetable prices slumped 3.2% y/y.


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215b.jpg" align="right" border="0" height="265" width="353">Excluding
food
&amp; energy prices rose 0.5% and reversed the October decline. The
m/m increase in the core PPI contrasted with expectations for a modest
0.2% increase. The PPI for finished consumer goods less food &amp;
energy rose 0.5% (1.2% y/y) and also reversed the October
decline.&nbsp; Finished durables prices increased 0.6% (0.8% y/y)
while core finished consumer nondurable goods prices rose a modest 0.4%
(2.3% y/y). Capital equipment prices increased for the first time in
three months. The 0.4% increase nevertheless left prices up just 0.4%
y/y, nearly the weakest increase since 2003.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215c.jpg" align="right" border="0" height="265" width="353">
Prices for intermediate
goods jumped 1.4%, reflecting the strength in energy prices. Core
prices also firmed and the 0.3% increase reversed the October decline.
The y/y gain in prices amounted to 0.3% which was a reversal from the
2.4% price deflation at the end of last year. Chemical, lumber and
metals prices have firmed. The crude materials PPI again reflected the
strength in energy prices and rose 5.7%. Core prices gave back the
October gain but y/y were up 20.4% due to the improved economy.
The
producer price data is available in Haver's USECON
database. More detailed data is in the PPI and in
the PPIR databases.· Bank Relationships
and the Depth of the Current Economic Crisis from the
Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-38.html">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E802/@E80201/@E80201.HTM" style="color: rgb(255, 255, 255);">Producer Price Index</a>(%)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>1.8</td>
<td>0.3</td>
<td>-0.6</td>
<td>2.7</td>
<td>6.4</td>
<td>3.9</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.5</td>
<td>-0.6</td>
<td>-0.1</td>
<td>1.2</td>
<td>3.4</td>
<td>2.0</td>
<td>1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>1.4</td>
<td>0.3</td>
<td>0.2</td>
<td>-1.5</td>
<td>10.5</td>
<td>4.0</td>
<td>6.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.3</td>
<td>-0.2</td>
<td>0.9</td>
<td>-3.0</td>
<td>7.4</td>
<td>2.8</td>
<td>6.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>5.7</td>
<td>5.4</td>
<td>-2.1</td>
<td>4.8</td>
<td>21.4</td>
<td>11.9</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>-0.8</td>
<td>0.5</td>
<td>3.6</td>
<td>&nbsp;20.4</td>
<td>14.8</td>
<td>15.6</td>
<td>20.8</td>
</tr>
</tbody>
</table>

</body></html>

There was a broadening of inflationary pressure last month as measured by the producer price index. The PPI for finished goods jumped 1.8% after the tame 0.3% October increase. The rise was by far the largest increase in months and it [...]

U.S. PPI Jumps As Fuel Costs Surge; Core Prices Remain Strong

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215a.jpg" align="right" border="0" height="265" width="353">There
was a
broadening of inflationary pressure last month as measured by the
producer price index. The PPI for finished goods jumped 1.8% after the
tame 0.3% October increase. The rise was by far the largest increase in
months and it lifted the y/y gain to 2.7%, its fastest since October of
last year. In addition, the November increase was more-than-double the
Consensus expectation.


 Higher energy costs led the strength in the
PPI last month. The 6.9% increase lifted the y/y increase to 10.6%, its
strongest since September 2008. Gasoline prices increased 8.2% (35.9%
y/y). Elsewhere, the gain in energy prices was more moderate. Fuel oil
prices increased 10.8% but they remained down 7.1% from last year.
Natural gas prices also increased a lesser 3.9% and they were down
15.6% from the year ago level. Food prices increased a moderate 0.5%
but the increase left prices 1.6% lower than last year. Beef &amp;
veal prices were off 8.4% y/y, dairy product prices fell 7.3% and
vegetable prices slumped 3.2% y/y.


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215b.jpg" align="right" border="0" height="265" width="353">Excluding
food
&amp; energy prices rose 0.5% and reversed the October decline. The
m/m increase in the core PPI contrasted with expectations for a modest
0.2% increase. The PPI for finished consumer goods less food &amp;
energy rose 0.5% (1.2% y/y) and also reversed the October
decline.&nbsp; Finished durables prices increased 0.6% (0.8% y/y)
while core finished consumer nondurable goods prices rose a modest 0.4%
(2.3% y/y). Capital equipment prices increased for the first time in
three months. The 0.4% increase nevertheless left prices up just 0.4%
y/y, nearly the weakest increase since 2003.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215c.jpg" align="right" border="0" height="265" width="353">
Prices for intermediate
goods jumped 1.4%, reflecting the strength in energy prices. Core
prices also firmed and the 0.3% increase reversed the October decline.
The y/y gain in prices amounted to 0.3% which was a reversal from the
2.4% price deflation at the end of last year. Chemical, lumber and
metals prices have firmed. The crude materials PPI again reflected the
strength in energy prices and rose 5.7%. Core prices gave back the
October gain but y/y were up 20.4% due to the improved economy.
The
producer price data is available in Haver's USECON
database. More detailed data is in the PPI and in
the PPIR databases.· Bank Relationships
and the Depth of the Current Economic Crisis from the
Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-38.html">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E802/@E80201/@E80201.HTM" style="color: rgb(255, 255, 255);">Producer Price Index</a>(%)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>1.8</td>
<td>0.3</td>
<td>-0.6</td>
<td>2.7</td>
<td>6.4</td>
<td>3.9</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.5</td>
<td>-0.6</td>
<td>-0.1</td>
<td>1.2</td>
<td>3.4</td>
<td>2.0</td>
<td>1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>1.4</td>
<td>0.3</td>
<td>0.2</td>
<td>-1.5</td>
<td>10.5</td>
<td>4.0</td>
<td>6.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.3</td>
<td>-0.2</td>
<td>0.9</td>
<td>-3.0</td>
<td>7.4</td>
<td>2.8</td>
<td>6.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>5.7</td>
<td>5.4</td>
<td>-2.1</td>
<td>4.8</td>
<td>21.4</td>
<td>11.9</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>-0.8</td>
<td>0.5</td>
<td>3.6</td>
<td>&nbsp;20.4</td>
<td>14.8</td>
<td>15.6</td>
<td>20.8</td>
</tr>
</tbody>
</table>

 Rising Exports Fuel Rise in
Japanese Industrial Production 
by <a href="/comment/Curley.html">Louise
Curley</a> December 15, 2009

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215d.jpg" align="right" border="0" height="265" width="353">The ZEW
indicator of investors sentiment in Germany declined for the third
month in December.&nbsp; The percent balance of opinion on macro
expectations six months ahead is now at 50.4%, down 7.3 percentage
points from the peak of 57.7% in September.&nbsp; The
current&nbsp; level, however, is well above the long term average
of 27.0%.&nbsp; Although the balance between those respondents who
view current conditions negatively over those who view them positively
is still high at 60.6%, it declined five percentage points in December
and is well below the peak, 92.8%, reached in May of this year when it
was hard to find any optimists.&nbsp; The first chart shows the
percent balances for current conditions and the macro expectations over
the next six months.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215e.jpg" align="right" border="0" height="265" width="353">The survey
is based on the opinions of 277
investors and analysts and took place from November 30 through December
14.&nbsp; During that period, data on new orders, industrial
production and retail sales for October were announced.&nbsp;
Industrial Production was down 1.86%, new orders for manufacturing were
down 2.57%, motor vehicle sales were down 1.37% and retail sales,
excluding motor vehicle sales, were flat.&nbsp; These data
suggested that the economic expansion might be somewhat slower than
earlier expectations and may have dampened some of the optimism of the
participants.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215f.jpg" align="right" border="0" height="265" width="353">In spite
of the decline in the overall outlook,
participants in the survey are still relatively optimistic regarding
the profit outlook.&nbsp; There are only four industries out of the
thirteen industries surveyed where the current balance of opinion is
for lower profits.&nbsp; These are: banking, construction,
utilities and services.&nbsp; They are shown in the second
chart.&nbsp;&nbsp; Of the remaining industries--insurance,
chemicals/pharmaceuticals, steel/metal, electronics, machinery,
telecommunications, information technology--the balance of opinion is
for higher profits; and for vehicles/automotive and consumption/trade,
the balance of opinion is for smaller losses.&nbsp; The balance of
opinion for higher profits has risen significantly for the information
technology, machinery, steel/metal and chemicals/pharmaceuticals
industries, as can be seen in the third chart.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct&nbsp; 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09&nbsp;</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
<th scope="col">April 09</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Current Conditions</td>
<td>-60.6</td>
<td>-65.6</td>
<td>-72.2</td>
<td>-74.0</td>
<td>-77.2</td>
<td>-89.3</td>
<td>-89.7</td>
<td>-92.8</td>
<td>-91.6</td>
</tr>
<tr>
<td class="firstcol">Macro Expectations (6 Months
Ahead)&nbsp;</td>
<td>50.4</td>
<td>51.1</td>
<td>56.0</td>
<td>57.7</td>
<td>56.1</td>
<td>39.5</td>
<td>44.8</td>
<td>31.1</td>
<td>13.0</td>
</tr>
</tbody>
</table>

 Factory Production Resumes
Increase 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 15, 2009

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215g.jpg" align="right" border="0" height="265" width="353">Industrial
production resumed the increase that began this past July. The November
0.8% gain followed an unrevised unchanged reading for October and it
exceeded Consensus expectations for a 0.6% rise. The improvement from
October was across-the-board but it was greatest in the construction
supplies and in the materials areas. Output of consumer goods rose a
moderate 0.3% and that was led by a 2.9% (-13.5% y/y) increase in
furniture production and a 1.9% (-6.9% y/y) increase in motor vehicle
output. Output of machinery also rose (-19.7% y/y) as did computers
&amp; electronics (-4.0% y/y) production. Less the motor vehicle
&amp; high-tech sectors output increased 0.8%&nbsp;(-5.1% y/y)
last month. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215h.jpg" align="right" border="0" height="265" width="353">During
November, production increases amongst
industries sagged somewhat to 52.9% of the total from the high of 60.6%
during August. The breadth of increase from last July also dipped to a
still-firm 59.9%, near the strongest since early-2007.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091215i.jpg" align="right" border="0" height="265" width="353">Capacity
utilization rose further to 71.3%, its
highest level since December. In the factory sector alone utilization
rose to 68.4%. Utilization in the primary metals area has risen sharply
to 59.1% with the rebound in output. There's also been a slight rise in
utilization in the machinery area but it's down most elsewhere. The
overall increase was caused by another estimated 0.1% (-0.9% y/y)
decline in industry capacity.
The industrial production data
are available in Haver's USECON database.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Industrial
Production (SA,%)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Output</td>
<td>0.8</td>
<td>0.0</td>
<td>0.5</td>
<td>-5.2</td>
<td>-2.2</td>
<td>1.5</td>
<td>2.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Manufacturing</td>
<td>1.1</td>
<td>-0.2</td>
<td>0.6</td>
<td>-4.8</td>
<td>-3.2</td>
<td>1.4</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Consumer
Goods</td>
<td>0.3</td>
<td>0.1</td>
<td>1.0</td>
<td>-1.9</td>
<td>-2.6</td>
<td>0.9</td>
<td>0.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Business
Equipment</td>
<td>0.5</td>
<td>-0.3</td>
<td>-0.4</td>
<td>-8.1</td>
<td>-1.1</td>
<td>2.7</td>
<td>9.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Construction
Supplies</td>
<td>1.6</td>
<td>-1.6</td>
<td>-1.2</td>
<td>-12.5</td>
<td>-6.3</td>
<td>-2.0</td>
<td>2.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Materials</td>
<td>1.2</td>
<td>0.1</td>
<td>0.7</td>
<td>-4.8</td>
<td>-1.9</td>
<td>2.0</td>
<td>2.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Utilities</td>
<td>-1.8</td>
<td>1.6</td>
<td>0.3</td>
<td>-5.1</td>
<td>0.3</td>
<td>3.4</td>
<td>-0.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Capacity Utilization
(%)</td>
<td>71.3</td>
<td>70.6</td>
<td>70.0</td>
<td>74.4 (Nov. '08)</td>
<td>77.5</td>
<td>80.6</td>
<td>80.9</td>
</tr>
</tbody>
</table>

</body></html>

U.S. PPI Jumps As Fuel CostsSurge; Core Prices Remain Strong

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214e.jpg" align="left" border="0" height="265" width="353">
After rising for five consecutive months, industrial
production fell 0.6% in the Euro Area in October and 0.7% in the entire
European Union. The attached chart shows the index of Industrial
Production (2005=100) for the Euro Area and the European Union. There
is a spurious correlation between the two series due the fact that the
EU series includes the EA series. As with much of the data on the Euro
Area and the European Union it is not possible to derive a non Euro
Area part of the European Union.
Not all of the countries of the European Union have reported
October data. Euro stat's totals for the Euro Area and the European
Union include their estimates of the missing data and these estimates
are not published. The totals are, therefore, preliminary and
frequently revised.
In the Euro Area, the big three--Germany experienced a 1.8%
decline in industrial production, France, a 0.9% decline and Italy, a
0.5% increase. Declines were recorded in Ireland, 2.8%, Greece, 0.8%,
Portugal, 1.4%. The biggest decline in production in the Euro area,
that of Slovenia, was 3.2%. The largest increase in production in the
Euro Area was in Finland at 2.2%.
Of the published data, among the non Euro Area countries,
industrial production in the UK declined 0.1%, and in Sweden, 0.5%.
Industrial Production in Latvia and Lithuania increased 0.1% and 0.4%
respectively. Production in Bulgaria rose 2.1%, the first increase
since September, 2008.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Industrial
Production (2005=100)</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09</th>
<th scope="col">Jun 09</th>
<th scope="col">May 08&nbsp;</th>
<th scope="col">Apr 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">European Area (m/m % change)</td>
<td>-0.73</td>
<td>0.12</td>
<td>0.68</td>
<td>0.18</td>
<td>0.32</td>
<td>0.53</td>
<td>-0.39</td>
</tr>
<tr>
<td class="firstcol">European Union (m/m % change)</td>
<td>-0.61</td>
<td>0.21</td>
<td>1.13</td>
<td>0.26</td>
<td>0.86</td>
<td>1.06</td>
<td>-0.47</td>
</tr>
<tr class="odd">
<td class="firstcol">Bulgaria</td>
<td>2.1</td>
<td>-3.6</td>
<td>-0.21</td>
<td>-0.5</td>
<td>-0.6</td>
<td>-1.4</td>
<td>-0.1</td>
</tr>
<tr>
<td class="firstcol">Slovenia</td>
<td>-3.2</td>
<td>0.7</td>
<td>8.0</td>
<td>-0.6</td>
<td>0.3</td>
<td>2.9</td>
<td>-4.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Ireland</td>
<td>-2.8</td>
<td>11.3</td>
<td>-16.0</td>
<td>7.9</td>
<td>7.3</td>
<td>-3.6</td>
<td>-3.5</td>
</tr>
<tr>
<td class="firstcol">Finland</td>
<td>2.2</td>
<td>-1.7</td>
<td>2.4</td>
<td>-1.6</td>
<td>1.5</td>
<td>-0.7</td>
<td>-1.9</td>
</tr>
</tbody>
</table>
</body></html>

After rising for five consecutive months, industrial production fell 0.6% in the Euro Area in October and 0.7% in the entire European Union. The attached chart shows the index of Industrial Production (2005=100) for the Euro Area and [...]

A Pause In Economic Activity In The European Union

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214d.jpg" align="left" border="0" height="265" width="353">
Industrial output in EMU has backtracked. The 0.3% drop in
October flattens out progress in the sector and leaves manufacturing IP
flat in the fourth quarter compared to its level in Q3. Consumer goods
output is off sharply in the new quarter while capital goods output is
strongly higher. Intermediate goods output is up sharply.
Among the five largest EU economics only Spain saw a rise in
IP month-to-month in October. Still three month growth rates are up for
the zone and are strong for the Big Five except for a 1.8% annual rate
drop in the UK and a horrific-looking -20.2% from Spain whose numbers
are notoriously volatile (Spain&#8217;s three month growth rate for IP was UP
by 28% in Sept, just one month ago).
Japan&#8217;s TankanIn Asia Japan has reported
out its Tankan results for December. Its large company index rose by a
solid nine points and exceeded the forecasts of economists. Still at a
raw reading of -24 it clearly says that large corporate respondents are
still more negative than positive in this Tankan diffusion
presentation. Even if they are less negative than they were last
quarter the results are far from satisfying. Firms in Japan are
engaging in deeper spending cuts to stay alive in a still-tough
economy. Japan has slipped back into the grip of deflation something
that tends to make businessmen more defense-minded- that is not the way
to mount a recovery. With the yen still so strong it is hard for Japan
to export itself to prosperity. Paradoxically Japanese firms continue
to engage in outsourcing with Sony making a new announcement to that
effect transferring work to China. While outsourcing may solve the
firm&#8217;s problems it does not help Japan out of its economic difficulties.
The global recoveryOn balance world trade
is making some recovery and that is helping trade-dependent countries
like Japan to do better. But Japan is still beset with problems and
large block of pubic indebtedness that keeps its government from
engaging in too much in the way of pump-priming expenditures. Europe is
having a simple slip but its broader growth rates tell a story of
slowing that transcends one monthly report. When central bankers and
national leaders say that they are still concerned about the economy
and that there is a risk of backsliding and that it is too soon to take
away the special stimulus brought forward in the crisis&#8230; this is the
sort of report that brings those concerns to life.
Treatment of the heroes of the crisisAgainst
this background we have to wonder about the all the flack being
shoveled onto Fed Chairman Ben Bernanke&#8217;s plate. Bernanke&#8217;s efforts
bolstered not just the US, but the world economy. Do the Fed bashers on
the House and Senate banking committees really have any idea what they
are protesting when they go after Gentile Ben? It was the fall in
standards and directions imposed on markets by the law makers who put
political agendas ahead of smart business practices as much as anything
that got us into this mess. Now we can see that despite huge government
and central banker efforts around the world the path to recovery
remains tentative. The US Congress is deeply involved in a witch hunt
for scapegoats. The Fed Chairman is a more convenient a target than he
is to blame. But with an angry electorate in the US and the next
election cycle looming a scapegoat is a prime need for politicians.

<table border="0" cellpadding="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol" colspan="11" style="padding-left: 0.25em; padding-right: 0.25em;">EURO-AREA
MFG IP</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Saar
except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Euro-Area
Detail</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Q-4</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>1.3%</td>
<td>2.5%</td>
<td>1.4%</td>
<td>0.6%</td>
<td>-12.1%</td>
<td>-13.7%</td>
<td>0.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Consumer</td>
<td>-1.7%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-8.3%</td>
<td>-0.2%</td>
<td>-3.5%</td>
<td>0.6%</td>
<td>-5.4%</td>
<td>-3.7%</td>
<td>-10.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;&nbsp;C-Durables</td>
<td>-1.4%</td>
<td>-5.1%</td>
<td>5.1%</td>
<td>-6.3%</td>
<td>1.3%</td>
<td>-12.9%</td>
<td>-9.2%</td>
<td>-18.0%</td>
<td>-18.2%</td>
<td>--</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;&nbsp;C-Non-durables</td>
<td>-1.6%</td>
<td>0.7%</td>
<td>-1.2%</td>
<td>-8.1%</td>
<td>-0.6%</td>
<td>-2.2%</td>
<td>1.9%</td>
<td>-3.3%</td>
<td>-1.5%</td>
<td>--</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;Intermediate</td>
<td>1.2%</td>
<td>1.0%</td>
<td>1.1%</td>
<td>13.7%</td>
<td>15.4%</td>
<td>15.6%</td>
<td>12.6%</td>
<td>-12.8%</td>
<td>-16.0%</td>
<td>13.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Capital</td>
<td>0.0%</td>
<td>1.5%</td>
<td>1.6%</td>
<td>12.8%</td>
<td>6.9%</td>
<td>6.2%</td>
<td>3.4%</td>
<td>-16.8%</td>
<td>-18.7%</td>
<td>9.3%</td>
</tr>
<tr class="grey1">
<td colspan="11" class="firstcol">Main
Euro-Area Countries
and UK IP in MFG</td>
</tr>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG Only</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Q:4-Date</td>
</tr>
<tr class="grey2">
<td class="firstcol">Germany:</td>
<td>-1.6%</td>
<td>3.7%</td>
<td>2.1%</td>
<td>17.6%</td>
<td>20.8%</td>
<td>19.1%</td>
<td>16.1%</td>
<td>-13.5%</td>
<td>-13.9%</td>
<td>9.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">France:IPxConstruct'n</td>
<td>-0.8%</td>
<td>-1.2%</td>
<td>3.0%</td>
<td>3.7%</td>
<td>9.0%</td>
<td>7.9%</td>
<td>6.6%</td>
<td>-8.4%</td>
<td>-10.6%</td>
<td>-3.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Italy</td>
<td>0.8%</td>
<td>-5.4%</td>
<td>6.0%</td>
<td>4.4%</td>
<td>6.0%</td>
<td>4.4%</td>
<td>4.0%</td>
<td>-13.7%</td>
<td>-16.5%</td>
<td>-5.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Spain</td>
<td>-3.0%</td>
<td>0.5%</td>
<td>-3.0%</td>
<td>-20.2%</td>
<td>28.0%</td>
<td>-0.2%</td>
<td>19.0%</td>
<td>-13.0%</td>
<td>-12.6%</td>
<td>-20.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">UK: EU member</td>
<td>0.0%</td>
<td>1.6%</td>
<td>-2.0%</td>
<td>-1.8%</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>-0.4%</td>
<td>-7.8%</td>
<td>-9.8%</td>
<td>2.3%</td>
</tr>
</tbody>
</table>
</body></html>

Industrial output in EMU has backtracked. The 0.3% drop in October flattens out progress in the sector and leaves manufacturing IP flat in the fourth quarter compared to its level in Q3. Consumer goods output is off sharply in the new [...]

EMU MFG Progress Hits The Skids.... More Questions Arise In Japan Despite Improved Tankan

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214a.jpg" align="right" border="0" height="265" width="353">
As the downward momentum in business sales recently slackened,
so too did businesses' attitude toward holding inventories. In constant
dollars, during 3Q '09 inventory cuts turned into accumulation that
added 0.9 percentage points to real GDP growth. In October the turn
continued as business inventories rose 0.2%, the first monthly increase
since last year. The gain followed a slightly revised 0.5% September
drop. Consensus expectations were for a 0.2% decline.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214b.jpg" align="right" border="0" height="265" width="353">
Inventory accumulation last month was apparent in the factory
and wholesale sectors. Wholesale inventories rose 0.3% but the gain was
largely driven by a 4.6% (+24.1% y/y) increase in petroleum
inventories. Elsewhere, accumulation was limited. In the factory
sector, inventories posted a modest 0.4% increase after a 1.4% drop.
However, the increase also was primarily driven by a 6.4% jump in
petroleum inventories.
Retail inventories were unchanged during October as motor
vehicle inventories rose 0.6% (-26.6% y/y) after a 4.1% September
increase. Furniture inventories also increased by 1.0% (-11.1% y/y)
after a 0.2% rise during September. Elsewhere, retail inventories
continued to decline, but at a slower rate. Clothing inventories fell
0.6% (-11.3% y/y) which was less than the 1.8% September drop. General
merchandise inventories fell negligibly (-6.3% y/y) following a 0.5%
September decline. Inventories at building materials and garden supply
stores fell 0.7% (-10.1% y/y) after a reduced 0.4% September decline.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214c.jpg" align="right" border="0" height="265" width="353">
For the fifth straight month, business sales rose and the 1.1%
(-8.2% y/y) increase reflected across-the-board gains. Retail sales
rose 1.3% during October and increased another 1.4% last month. Sales
of merchant wholesalers were quite strong for the third month although
much of the increase reflects higher oil prices. Factory shipments
jumped 3.5% (-1.2% y/y) but again, a 7.0% rise petroleum shipments
accounted for much of the total gain.
Despite a possible interest in slowing the rate of inventory
cutbacks, the inventory-to-sales ratio for total business fell to a
cycle low of 1.30 versus a high of 1.46 in January. The latest was the
lowest since last September. In the retail sector the ratio fell and
reversed the September increase. For manufacturers and wholesalers, the
ratio fell to new cycle lows.
The business sales and inventory data are available in Haver's
USECON database.
Visit the Wall Street Journal's Blog <a href="http://blogs.wsj.com/economics/2009/12/13/remembering-paul-samuelson/">Remembering
Paul Samuelson </a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Business
Inventories (%)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.2</td>
<td>-0.5</td>
<td>-1.6</td>
<td>-12.6</td>
<td>0.6</td>
<td>4.0</td>
<td>6.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.0</td>
<td>0.5</td>
<td>-2.6</td>
<td>-13.5</td>
<td>-3.1</td>
<td>2.5</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Retail excl. Auto</td>
<td>-0.2</td>
<td>-0.7</td>
<td>-0.7</td>
<td>-7.6</td>
<td>-1.8</td>
<td>2.7</td>
<td>4.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.3</td>
<td>-0.8</td>
<td>-1.3</td>
<td>-13.5</td>
<td>3.1</td>
<td>6.2</td>
<td>8.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.4</td>
<td>-1.3</td>
<td>-0.9</td>
<td>-11.2</td>
<td>2.1</td>
<td>3.7</td>
<td>8.2</td>
</tr>
</tbody>
</table>
</body></html>

As the downward momentum in business sales recently slackened, so too did businesses' attitude toward holding inventories. In constant dollars, during 3Q '09 inventory cuts turned into accumulation that added 0.9 percentage points to [...]

U.S. Business Inventories' Gain The First Since 2008

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214a.jpg" align="right" border="0" height="265" width="353">
As the downward momentum in business sales recently slackened,
so too did businesses' attitude toward holding inventories. In constant
dollars, during 3Q '09 inventory cuts turned into accumulation that
added 0.9 percentage points to real GDP growth. In October the turn
continued as business inventories rose 0.2%, the first monthly increase
since last year. The gain followed a slightly revised 0.5% September
drop. Consensus expectations were for a 0.2% decline.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214b.jpg" align="right" border="0" height="265" width="353">
Inventory accumulation last month was apparent in the factory
and wholesale sectors. Wholesale inventories rose 0.3% but the gain was
largely driven by a 4.6% (+24.1% y/y) increase in petroleum
inventories. Elsewhere, accumulation was limited. In the factory
sector, inventories posted a modest 0.4% increase after a 1.4% drop.
However, the increase also was primarily driven by a 6.4% jump in
petroleum inventories.
Retail inventories were unchanged during October as motor
vehicle inventories rose 0.6% (-26.6% y/y) after a 4.1% September
increase. Furniture inventories also increased by 1.0% (-11.1% y/y)
after a 0.2% rise during September. Elsewhere, retail inventories
continued to decline, but at a slower rate. Clothing inventories fell
0.6% (-11.3% y/y) which was less than the 1.8% September drop. General
merchandise inventories fell negligibly (-6.3% y/y) following a 0.5%
September decline. Inventories at building materials and garden supply
stores fell 0.7% (-10.1% y/y) after a reduced 0.4% September decline.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214c.jpg" align="right" border="0" height="265" width="353">
For the fifth straight month, business sales rose and the 1.1%
(-8.2% y/y) increase reflected across-the-board gains. Retail sales
rose 1.3% during October and increased another 1.4% last month. Sales
of merchant wholesalers were quite strong for the third month although
much of the increase reflects higher oil prices. Factory shipments
jumped 3.5% (-1.2% y/y) but again, a 7.0% rise petroleum shipments
accounted for much of the total gain.
Despite a possible interest in slowing the rate of inventory
cutbacks, the inventory-to-sales ratio for total business fell to a
cycle low of 1.30 versus a high of 1.46 in January. The latest was the
lowest since last September. In the retail sector the ratio fell and
reversed the September increase. For manufacturers and wholesalers, the
ratio fell to new cycle lows.
The business sales and inventory data are available in Haver's
USECON database.
Visit the Wall Street Journal's Blog <a href="http://blogs.wsj.com/economics/2009/12/13/remembering-paul-samuelson/">Remembering
Paul Samuelson </a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Business
Inventories (%)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.2</td>
<td>-0.5</td>
<td>-1.6</td>
<td>-12.6</td>
<td>0.6</td>
<td>4.0</td>
<td>6.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.0</td>
<td>0.5</td>
<td>-2.6</td>
<td>-13.5</td>
<td>-3.1</td>
<td>2.5</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Retail excl. Auto</td>
<td>-0.2</td>
<td>-0.7</td>
<td>-0.7</td>
<td>-7.6</td>
<td>-1.8</td>
<td>2.7</td>
<td>4.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.3</td>
<td>-0.8</td>
<td>-1.3</td>
<td>-13.5</td>
<td>3.1</td>
<td>6.2</td>
<td>8.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.4</td>
<td>-1.3</td>
<td>-0.9</td>
<td>-11.2</td>
<td>2.1</td>
<td>3.7</td>
<td>8.2</td>
</tr>
</tbody>
</table>
 EMU MFG Progress Hits The
Skids.... More Questions Arise In Japan Despite Improved Tankan 
by <a href="/comment/Brusca.html">Robert
Brusca</a> December 14, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214d.jpg" align="left" border="0" height="265" width="353">
Industrial output in EMU has backtracked. The 0.3% drop in
October flattens out progress in the sector and leaves manufacturing IP
flat in the fourth quarter compared to its level in Q3. Consumer goods
output is off sharply in the new quarter while capital goods output is
strongly higher. Intermediate goods output is up sharply.
Among the five largest EU economics only Spain saw a rise in
IP month-to-month in October. Still three month growth rates are up for
the zone and are strong for the Big Five except for a 1.8% annual rate
drop in the UK and a horrific-looking -20.2% from Spain whose numbers
are notoriously volatile (Spain&#8217;s three month growth rate for IP was UP
by 28% in Sept, just one month ago).
Japan&#8217;s TankanIn Asia Japan has reported
out its Tankan results for December. Its large company index rose by a
solid nine points and exceeded the forecasts of economists. Still at a
raw reading of -24 it clearly says that large corporate respondents are
still more negative than positive in this Tankan diffusion
presentation. Even if they are less negative than they were last
quarter the results are far from satisfying. Firms in Japan are
engaging in deeper spending cuts to stay alive in a still-tough
economy. Japan has slipped back into the grip of deflation something
that tends to make businessmen more defense-minded- that is not the way
to mount a recovery. With the yen still so strong it is hard for Japan
to export itself to prosperity. Paradoxically Japanese firms continue
to engage in outsourcing with Sony making a new announcement to that
effect transferring work to China. While outsourcing may solve the
firm&#8217;s problems it does not help Japan out of its economic difficulties.
The global recoveryOn balance world trade
is making some recovery and that is helping trade-dependent countries
like Japan to do better. But Japan is still beset with problems and
large block of pubic indebtedness that keeps its government from
engaging in too much in the way of pump-priming expenditures. Europe is
having a simple slip but its broader growth rates tell a story of
slowing that transcends one monthly report. When central bankers and
national leaders say that they are still concerned about the economy
and that there is a risk of backsliding and that it is too soon to take
away the special stimulus brought forward in the crisis&#8230; this is the
sort of report that brings those concerns to life.
Treatment of the heroes of the crisisAgainst
this background we have to wonder about the all the flack being
shoveled onto Fed Chairman Ben Bernanke&#8217;s plate. Bernanke&#8217;s efforts
bolstered not just the US, but the world economy. Do the Fed bashers on
the House and Senate banking committees really have any idea what they
are protesting when they go after Gentile Ben? It was the fall in
standards and directions imposed on markets by the law makers who put
political agendas ahead of smart business practices as much as anything
that got us into this mess. Now we can see that despite huge government
and central banker efforts around the world the path to recovery
remains tentative. The US Congress is deeply involved in a witch hunt
for scapegoats. The Fed Chairman is a more convenient a target than he
is to blame. But with an angry electorate in the US and the next
election cycle looming a scapegoat is a prime need for politicians.

<table border="0" cellpadding="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol" colspan="11" style="padding-left: 0.25em; padding-right: 0.25em;">EURO-AREA
MFG IP</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Saar
except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Euro-Area
Detail</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Q-4</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>1.3%</td>
<td>2.5%</td>
<td>1.4%</td>
<td>0.6%</td>
<td>-12.1%</td>
<td>-13.7%</td>
<td>0.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Consumer</td>
<td>-1.7%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-8.3%</td>
<td>-0.2%</td>
<td>-3.5%</td>
<td>0.6%</td>
<td>-5.4%</td>
<td>-3.7%</td>
<td>-10.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;&nbsp;C-Durables</td>
<td>-1.4%</td>
<td>-5.1%</td>
<td>5.1%</td>
<td>-6.3%</td>
<td>1.3%</td>
<td>-12.9%</td>
<td>-9.2%</td>
<td>-18.0%</td>
<td>-18.2%</td>
<td>--</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;&nbsp;C-Non-durables</td>
<td>-1.6%</td>
<td>0.7%</td>
<td>-1.2%</td>
<td>-8.1%</td>
<td>-0.6%</td>
<td>-2.2%</td>
<td>1.9%</td>
<td>-3.3%</td>
<td>-1.5%</td>
<td>--</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;Intermediate</td>
<td>1.2%</td>
<td>1.0%</td>
<td>1.1%</td>
<td>13.7%</td>
<td>15.4%</td>
<td>15.6%</td>
<td>12.6%</td>
<td>-12.8%</td>
<td>-16.0%</td>
<td>13.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Capital</td>
<td>0.0%</td>
<td>1.5%</td>
<td>1.6%</td>
<td>12.8%</td>
<td>6.9%</td>
<td>6.2%</td>
<td>3.4%</td>
<td>-16.8%</td>
<td>-18.7%</td>
<td>9.3%</td>
</tr>
<tr class="grey1">
<td colspan="11" class="firstcol">Main
Euro-Area Countries
and UK IP in MFG</td>
</tr>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG Only</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>3-Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Q:4-Date</td>
</tr>
<tr class="grey2">
<td class="firstcol">Germany:</td>
<td>-1.6%</td>
<td>3.7%</td>
<td>2.1%</td>
<td>17.6%</td>
<td>20.8%</td>
<td>19.1%</td>
<td>16.1%</td>
<td>-13.5%</td>
<td>-13.9%</td>
<td>9.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">France:IPxConstruct'n</td>
<td>-0.8%</td>
<td>-1.2%</td>
<td>3.0%</td>
<td>3.7%</td>
<td>9.0%</td>
<td>7.9%</td>
<td>6.6%</td>
<td>-8.4%</td>
<td>-10.6%</td>
<td>-3.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Italy</td>
<td>0.8%</td>
<td>-5.4%</td>
<td>6.0%</td>
<td>4.4%</td>
<td>6.0%</td>
<td>4.4%</td>
<td>4.0%</td>
<td>-13.7%</td>
<td>-16.5%</td>
<td>-5.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Spain</td>
<td>-3.0%</td>
<td>0.5%</td>
<td>-3.0%</td>
<td>-20.2%</td>
<td>28.0%</td>
<td>-0.2%</td>
<td>19.0%</td>
<td>-13.0%</td>
<td>-12.6%</td>
<td>-20.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">UK: EU member</td>
<td>0.0%</td>
<td>1.6%</td>
<td>-2.0%</td>
<td>-1.8%</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>-0.4%</td>
<td>-7.8%</td>
<td>-9.8%</td>
<td>2.3%</td>
</tr>
</tbody>
</table>
 A Pause In Economic Activity In
The European Union 
by <a href="/comment/Curley.html">Louise
Curley</a> December 14, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091214e.jpg" align="left" border="0" height="265" width="353">
After rising for five consecutive months, industrial
production fell 0.6% in the Euro Area in October and 0.7% in the entire
European Union. The attached chart shows the index of Industrial
Production (2005=100) for the Euro Area and the European Union. There
is a spurious correlation between the two series due the fact that the
EU series includes the EA series. As with much of the data on the Euro
Area and the European Union it is not possible to derive a non Euro
Area part of the European Union.
Not all of the countries of the European Union have reported
October data. Euro stat's totals for the Euro Area and the European
Union include their estimates of the missing data and these estimates
are not published. The totals are, therefore, preliminary and
frequently revised.
In the Euro Area, the big three--Germany experienced a 1.8%
decline in industrial production, France, a 0.9% decline and Italy, a
0.5% increase. Declines were recorded in Ireland, 2.8%, Greece, 0.8%,
Portugal, 1.4%. The biggest decline in production in the Euro area,
that of Slovenia, was 3.2%. The largest increase in production in the
Euro Area was in Finland at 2.2%.
Of the published data, among the non Euro Area countries,
industrial production in the UK declined 0.1%, and in Sweden, 0.5%.
Industrial Production in Latvia and Lithuania increased 0.1% and 0.4%
respectively. Production in Bulgaria rose 2.1%, the first increase
since September, 2008.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Industrial
Production (2005=100)</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09</th>
<th scope="col">Jun 09</th>
<th scope="col">May 08&nbsp;</th>
<th scope="col">Apr 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">European Area (m/m % change)</td>
<td>-0.73</td>
<td>0.12</td>
<td>0.68</td>
<td>0.18</td>
<td>0.32</td>
<td>0.53</td>
<td>-0.39</td>
</tr>
<tr>
<td class="firstcol">European Union (m/m % change)</td>
<td>-0.61</td>
<td>0.21</td>
<td>1.13</td>
<td>0.26</td>
<td>0.86</td>
<td>1.06</td>
<td>-0.47</td>
</tr>
<tr class="odd">
<td class="firstcol">Bulgaria</td>
<td>2.1</td>
<td>-3.6</td>
<td>-0.21</td>
<td>-0.5</td>
<td>-0.6</td>
<td>-1.4</td>
<td>-0.1</td>
</tr>
<tr>
<td class="firstcol">Slovenia</td>
<td>-3.2</td>
<td>0.7</td>
<td>8.0</td>
<td>-0.6</td>
<td>0.3</td>
<td>2.9</td>
<td>-4.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Ireland</td>
<td>-2.8</td>
<td>11.3</td>
<td>-16.0</td>
<td>7.9</td>
<td>7.3</td>
<td>-3.6</td>
<td>-3.5</td>
</tr>
<tr>
<td class="firstcol">Finland</td>
<td>2.2</td>
<td>-1.7</td>
<td>2.4</td>
<td>-1.6</td>
<td>1.5</td>
<td>-0.7</td>
<td>-1.9</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Business Inventories' GainThe First Since 2008

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
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</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091211d.jpg" align="left" border="0" height="265" width="353">
While it would seem to pose a conundrum for the Bank of
England, few are expecting any monetary response to the rising
inflation trends that are developing in the UK. Both core and headline
factory gate prices are showing the same sort of pressure building.
Yr/Yr inflation at the producer level already is at 2.9% for the
headline and at 2% for the core, levels that would be at or above the
ceiling rate were this the CPI (HICP; actually the HICP itself is
running at a 2% pace as of September). PPI price trends took a bit of a
break in November with the headline rate below its pace of the previous
three months; the core showed its smallest rise in four months.
The UK economy is still struggling and getting recovery going
is still job-one. So it is not expected that the BOE will react to the
rising inflation rate. Indeed, it is hoped that the weakness in the
economy will keep these pressures from building and that the current
rise proves to be a rogue wave of inflation that is not followed by any
others and that dissipates harmlessly on the shores of discretion. That
prognosis may prove be correct, but for the moment it seems a bit of
wishful thinking. Still, if I were a BOE governor I doubt I would have
the stomach to attack inflation now under the circumstances. Even so
that does not make it the right thing to do. It is a conundrum of the
first order.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" class="firstcol" colspan="8">UK
PPI MFG net output prices</th>
</tr>
</thead>
<tbody>
<tr class="grey5">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%m/m</td>
<td colspan="4">%-SAAR</td>
</tr>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>NOV-09</td>
<td>OCT-09</td>
<td>SEP-09</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG</td>
<td>0.3%</td>
<td>0.6%</td>
<td>0.7%</td>
<td>6.5%</td>
<td>5.0%</td>
<td>2.9%</td>
<td>5.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Core</td>
<td>0.1%</td>
<td>0.5%</td>
<td>0.5%</td>
<td>4.8%</td>
<td>2.7%</td>
<td>2.0%</td>
<td>5.1%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">Core: ex food beverages,
tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
</body></html>

While it would seem to pose a conundrum for the Bank of England, few are expecting any monetary response to the rising inflation trends that are developing in the UK. Both core and headline factory gate prices are showing the same [...]

Inflation's acceleration is clear, so is the policy conundrum

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

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Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

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Charts of the Week: Tariff Truce, Tenuous Trust

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U.S. light vehicle sales dropped 2.9% (+6.5% y/y) to 17.31 million units (SAAR) in April after surging 10.8% to 17.82 million units in March. The retreat in April vehicle sales accompanied a 1.7% y/y rise in real disposable income through March, which compared to 2.0% growth last year.

Sales declines were broad-based last month. Light truck sales fell 1.3% (+9.9% y/y) during April to 14.34 million units (SAAR), after rising 12.4% in March. Purchases of domestically-made light trucks declined 1.2% (+11.9% y/y) to 11.02 million units, after jumping 12.5% in March. Sales of imported light trucks fell 1.8% (+4.4% y/y) to 3.32 million units, following an 11.6% March surge.

Trucks’ record 82.8% share of the light vehicle market last month compared to 81.5% in March and 80.3% in April of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales also declined last month, down 9.5% (-7.5%) to 2.97 million units (SAAR) following a 3.5% March rise. The decline reversed all of the increase over the prior two months. Purchases of domestically-produced cars fell 9.8% (-4.3% y/y) last month to 2.22 million units, after rising 3.8% in March. Sales of imported autos declined 9.6% (-15.7% y/y) to 0.75 million units, following a 2.5% March increase.

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the I**NDUSTRY** database.

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- Light truck sales pull back, while auto sales tumble.
- Both domestic and imported sales decline.
- Imports' market share slips further.

U.S. Light Vehicle Sales Fall in April

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The ISM Purchasing Managers Index of activity in the manufacturing sector slipped to 48.7 in April from 49.0 during March and 50.3 in February. It remained up from a low of 46.9 in October of last year. A level of 50 is the break-even point between a rising and falling level of activity. The Action Economics Forecast Survey expected a reading of 47.8 for April. The series reached a monthly high of 63.8 in March 2021.

Two of the five component indexes weakened last month. The April production index fell to 44.0 after declining to 48.3 in March. It was the lowest level since May 2020. A lessened 19.8% (NSA) of respondents reported higher production while an increased 24.2% reported lower output. The inventories index declined to 50.8 last month from 53.4 in March. The index remained up from a low of 43.2 in October of last year.

Moving higher, the new orders index rose to 47.2 last month from 45.2 in March. The index remained below a January high of 55.1. Twenty-eight percent (NSA) of respondents reported higher new orders while 26.7% reported a decline. The employment index rose to 46.5 from 44.7 in March. It was below a high of 50.3 in January. A greater 13.1% (NSA) of respondents reported more hiring while a fewer 16.2% indicated less. The supplier delivery index rose to 55.2 from 53.5 in March. A higher 16.6% (NSA) of respondents reported slower delivery speeds while a fairly steady 6.2% reported a quickening.

The prices index, which is not part of the composite series, edged up to 69.8 (NSA) in April after increasing to 69.4 in March. It was the highest level since June 2022, up from a December 2022 low of 39.4. An increased 49.2% of respondents reported higher prices last month, up from 12.2% in November, while a higher 9.7% reported lower prices.

In other series, the export orders index plummeted to 43.1 in April from 49.6 during March. It was down from the high of 52.4 in January. The imports index fell sharply to 47.1 from 50.1 in March. It was the lowest reading since December 2023. The order backlog index dropped to 43.7 (NSA) last month from 44.5 in March. It was the lowest level in five months.

The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

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- Declines in last three months follow earlier improvement.
- Production & inventories account for m/m shortfall.
- Prices index edges up to another three-year high.

U.S. ISM Manufacturing Index Indicates Contraction in April

Winnie Tapasanun

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The value of construction put in place unexpectedly fell 0.5% m/m in March after rises of 0.6% in February (+0.7% initially) and 0.1% in January (-0.5% previously), data from the U.S. Census Bureau showed. The March reading was the first m/m fall following five straight m/m gains. A 0.3% m/m March rise had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase decelerated to 2.8% in March, the lowest since May 2019, after registering at 3.4% in February and January. The latest y/y figure was lower than 8.7% in March 2024; thus, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.

Private construction slid 0.6% (+2.3% y/y) in March, down for the first time since September, following increases of 0.7% in February (+0.9% initially) and 0.1% in January (-0.7% previously). Residential private construction fell 0.4% (+2.8% y/y) in March, the first m/m fall in six months, after an unrevised 1.3% gain in February. Home improvement building dropped 1.2% (+13.4% y/y), the first m/m decline since December, following a 2.3% February gain; it was 41.1% of the residential private construction. Single-family building edged up 0.1% (-0.8% y/y), the smallest of seven consecutive m/m increases, after a 0.8% February rise; it was 46.6% of the residential private construction. Meanwhile, multi-family building was essentially unchanged m/m (-12.1% y/y) in March following 15 straight m/m decreases; it was 12.3% of the residential private construction.

Nonresidential private construction fell 0.8% (+1.6% y/y) in March after a 0.1% increase in February (+0.4% initially) and a 0.1% easing in January (-0.2% previously). The March fall reflected m/m drops in the following nonresidential private constructions. These included religious (-2.9%; +16.4% y/y), health care (-2.2%; -5.2% y/y), office (-1.8%; +2.7% y/y), educational (-1.7%; -4.2% y/y), lodging (-1.6%; -1.0% y/y), commercial (-1.0%; -5.8% y/y), manufacturing (-0.4%; +3.6% y/y), communication (-0.3%; +2.2% y/y), and utilities (-0.1%; +7.0% y/y). In contrast, private constructions for amusement & recreation (1.5%; 7.0% y/y) and transportation (0.7%; 10.2% y/y) rose m/m in March.

The value of public construction declined 0.2% (+4.7% y/y) in March after holding steady in February (+0.2% initially), reflecting a 0.2% increase (-1.9% y/y) in residential public construction and a 0.2% easing (+4.8% y/y) in nonresidential public construction. The March decline reflected m/m drops in the following nonresidential public constructions. These included utilities (-4.8%; -12.8% y/y), commercial (-1.6%; +40.3% y/y), amusement & recreation (-1.0%; +19.1% y/y), educational (-0.6%; +7.6% y/y), sewage & waste disposal (-0.6%; +10.6% y/y), and health care (-0.4%; +13.0% y/y). Notably, spending on highways & streets, which made up 28.7% of public construction spending, fell 0.5% (-2.4% y/y) in March, the first m/m fall since October, following a 0.9% increase in February. To the upside, the following public constructions rose m/m in March: office (1.6%; 6.0% y/y), transportation (1.4%; 7.3% y/y), public safety (0.7%; 4.1% y/y), conservation & development (0.6%; 4.7% y/y), and water supply (0.6%; 12.2% y/y).

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

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- March construction spending -0.5% m/m; +2.8% y/y, the lowest y/y rate since May ’19.
- Residential private construction -0.4% m/m, led by a 1.2% drop in home improvement building.
- Nonresidential private construction -0.8% m/m, down for the second month in three.
- Public sector construction -0.2% m/m, reflecting a 0.2% decline in nonresidential public building.

U.S. Construction Spending Unexpectedly Drops in March, the First M/M Fall Since September

Carol Stone, CBE

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Initial claims for unemployment insurance rose 18,000 in the week ended April 26 to 241,000, seasonally adjusted.  This is higher by 16,000 than the Action Economics Forecast Survey amount of 225,000 and is the largest amount since the week of February 22. The previous week’s actual count was revised up by 1,000 to 223,000, from 222,000 reported initially.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” – in the week ended April 19 was 1.916 million, up 83,000 from the prior week’s 1.833 million; that earlier amount was revised down by 8,000.

The insured unemployment rate, that is, the number of beneficiaries as a percentage of covered employment, was 1.3% in the April 19 week, following 1.2% continuously since the week of January 6, 2024.

Economic conditions vary widely across states and territories.  In the week ended April 12, the highest unemployment rates were in New Jersey (2.39%), California (2.24%), Washington (2.19%), Rhode Island (2.17%) and Massachusetts (1.93%).  The lowest rates were in Florida (0.35%), South Dakota (0.40%), Alabama (0.41%), Virginia (0.45%) and Tennessee (0.48%).  Rates in other notable states include the Illinois (1.85%), New York (1.71%), Pennsylvania (1.54%) and Texas (1.09%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in U**SECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Actual initial claims amount is 16,000 more than forecast.
- Total beneficiaries rose by 83,000.
- Insured unemployment rate ticked up to 1.3% after 15 months at 1.2%.

Economy in Brief: December 2009

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